Northampton restaurateur Claudio Guerra downsizes

Spoleto's relocated from Main Street to 1 Bridge St. in Northampton late last year, part of an effort by owner Claudio Guerra to keep costs down at the Spoleto Restaurant Group. Purchase photo reprints »

Spoleto restaurant relocated to 1 Bridge St. in Northampton late last year, part of an effort by owner Claudio Guerra to keep costs down at the Spoleto Restaurant Group. Purchase photo reprints »

NORTHAMPTON — After years of expanding his chain of popular restaurants, Claudio Guerra is reversing course in a streamlining effort that he says reflects the realities of the industry and will mean a better dining experience for customers.

In the last half year, Spoleto Restaurant Group has shed two of the chain’s seven restaurants, consolidated menu concepts at the remaining five establishments and reduced overhead and other expenses that have little to do with food preparation.

“I think what we’re doing is what everybody does in small or big business ... I don’t care if it’s a small mom-and-pop business or Bank of America, when the going gets tough you have to tighten the buckle a little bit,” Guerra said last week from his business office in the Northampton Industrial Park.

The changes are the result of factors related to the economic recession combined with an increased cost of doing business. The costs of food, health and liability insurance, workman’s compensation and other expenses have all risen, but the recession has prevented the Spoleto group from increasing prices accordingly for fear of scaring away customers.

“The margins are really tight and we have to be really precise about controlling the numbers,” Guerra said. “So going from seven restaurants to five enables us to be 20 percent more intense on the existing businesses. We’re not stretched as thin.”

The biggest change occurred last fall when Guerra moved the chain’s flagship restaurant, Spoleto Northampton, from its longtime rental space at 50 Main St. into a building he owns at 1 Bridge St. In the process, he closed Paradise City Tavern, the restaurant he had opened in that same location four years earlier to replace his high-end restaurant Del Raye Bar & Grill.

Last week Guerra closed Spoleto Express on King Street. In its place will be King Street Eats, which Tully McColgan plans to open in early February. McColgan owns Tully O’Reilly’s Pub on Pearl Street.

And in a final move that most patrons won’t notice, Spoleto will close its business office and warehouse in the industrial park in March and move those operations into existing restaurant buildings.

Guerra and William Collins, Spoleto Restaurant Group’s operations manager, said the changes will enable the business to focus on the restaurants that have the greatest potential or are generating the most profit.

“If you make 7 or 8 percent profit on a restaurant that does $2 million versus one that does a million, you are going to concentrate on the one that gets you more milk, right?” Guerra said. “That’s kind of what we’ve been doing.”

In addition to Spoleto Northampton and Spoleto East Longmeadow, the chain also includes Mama Iguana’s in Northampton and Springfield and Pizzeria Paradiso in Northampton.

Guerra opened Spoleto 25 years ago in the Crafts Avenue space now occupied by Pizzeria Paradiso. In the years since he appears to have acquired a knack for reversing course at the right time.

Four years ago, as the effects of the recession became evident, he announced he would close Del Raye, a fine-dining establishment once housed in Spoleto’s current location on Bridge Street. He renovated that space and opened Paradise City Tavern, which offered cheaper American fare.

Guerra predicted at the time that customers wanted such a change, given the struggling economy.

“The Del Raye was out of tune with the realities of the economy right now,” Guerra told the Gazette when the restaurant closed in 2008.

Last fall he closed Paradise City Tavern to make way for Spoleto, a move that saved the business a considerable amount of rent money. That move has also had other advantages, he said.

Guerra said there was tremendous pressure to fill the Spoleto’s 170-seat restaurant on Main Street “by whatever means it took.” There were promotions offering three-course meals for $20 and other discounts, tactics that got people in the door but limited the foods the restaurant could serve.

With that pressure gone, Collins said, Spoleto has been able to retool its menu.

“We’ve really aimed to take the level of food up to the next level ...,” he said. “I think for both of us it’s exciting to see what it’s turned back into.”

Guerra said that even though the new Spoleto is two-thirds of the size of the old location, it’s 33 percent busier.

Collins said a similar uptick has occurred at Spoleto East Longmeadow.

“It seems like people are looking for that extra level of quality,” he said. “They are willing to trade in that three-course experience for some really thought-out and fresh-made food.”

Collins said part of the streamlining that’s under way involves focusing on a couple of menu concepts. The Spoleto restaurants, for example, now have similar menus. The same holds true for the Mama Iguana’s restaurants. In the past, each restaurant had its own menu.

“Instead of spreading ourselves out to many different recipe books and many different operations, now we have three concepts,” Collins said.